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Bitcoin’s price jumped by nearly $10,000 on Sunday after U.S. President Trump confirmed plans to create a strategic crypto reserve.
However, while most traders are optimistic about the rebound, several market analysts believe it could be a fake breakout.
A Fakeout or a Breakout?
In an X post, popular crypto analyst Ali Charts noted that BTC’s surge above $90,000 would not last long as it could face rejection soon before the next leg up. He pointed out that the top cryptocurrency could be rebounding like it usually does when it hits the 200-day moving average.
The 200-day MA is typically used to determine the long-term trend of an asset in traditional capital markets. It is usually considered to be in an uptrend when it stays above its 200-day MA.
Martinez pointed out that the recent surge could be mirroring BTC’s price pattern in previous cycles. He compared the current price action to a similar move in the 2021 bull cycle.
According to historical data, bitcoin had struggled to stay above the 200-day MA in December 2021. Despite a widespread belief that the top crypto would hit $100,00 before the year ended, BTC was rejected long before it had the chance to come anywhere near it.
After recording a sideways price action for most of December, bitcoin surged above $50,000, raising optimism in the market. But the rebound was short-lived, as the asset quickly slumped and entered a violent bear market.
Not Time to FOMO
Ali’s statement echoes a similar analysis made by Reflexivity Research co-founder Will Clemente. The popular crypto analyst had earlier noted that a breakout move from BTC above $90,000 could be bearish.
He pointed out that the market is filled with fear of missing out (FOMO) over President Trump’s announcement. Clemente then warned against “chasing” the fake breakout as a price correction could be imminent.
Meanwhile, several altcoins mentioned in the proposed bitcoin reserve, including XRP, ADA, and SOL, have benefited. Although industry executives are not keen on their inclusion, these tokens have recorded double-digit surges in their prices over the past 24 hours.
This article first appeared at CryptoPotato
